LONDON--(BUSINESS WIRE)--Television audiences across the world are wholeheartedly embracing
online pay-TV, as the proportion of consumers with Over-the-Top (OTT)
subscriptions has leapt from 25% to 45% in just 12 months
with even more planning to sign up prior to Christmas, new research from
subscription, billing and CRM specialist Paywizard reveals. The
study also reveals 30% of all consumers surveyed intend to
subscribe to pay-OTT services such as Netflix, Amazon Prime Instant
Video and Hulu in the run-up to Christmas this year, up from 27% in 2015
– with 18% planning on subscribing for the first time and 12%
on top of existing subscriptions.

The research into TV viewing trends during the Christmas period shows
the projected surge in OTT uptake is taking place as 59% of the 6,242
consumers surveyed plan to watch more TV overall this festive
season. The study, conducted by Research Now and commissioned by Paywizard
for the second year running, includes results from six bellwether
television markets around the globe: the United States, the United
Kingdom, Germany, Brazil, Australia and Singapore.

While Christmas 2016 looks strong for OTT operators, as the projected
new subscriber figures (18%) added to those for existing customers (45%)
would take the total percentage of subscribers to 63%
after Christmas. However, the findings also reveal that 50% of
those planning to take an OTT service for the first time this holiday
season intend to cancel their subscription within six months.

Bhavesh Vaghela, Paywizard’s Chief Marketing Officer,
comments: “There are definitely huge opportunities for OTT players to
build on the momentum paid video-on-demand services are showing across
all markets. Nonetheless, while OTT operators are poised for another
huge lift this Christmas, it is clear that subscribers view these
services as an activity they can dip in and out of. Keeping customers
loyal is the major challenge facing providers. As OTT adoption nears the
60% range, operators need to address every point of the customer journey
and work harder to keep new and old subscribers alike.”

The research also indicates that despite global OTT brands Netflix
and Amazon Prime driving pay- OTT growth, the trend is also
creating opportunities for local operators, as native challenger brands
such as Foxtel Play in Australia, Maxdome in Germany and Now
TV in the UK show strong potential – with 32%, 22%,and
19% respectively of first-time subscribers planning to sign up to
these services this Christmas.

Vaghela notes: “The research provides powerful evidence that the pay-TV
sector is a dynamic and rapidly changing marketplace, where incumbency
is no guarantee of future success and challenger brands remain on the
rise. There is still enormous potential for new and local OTT players to
carve their own niche and attract both first-time and multi-service
subscribers. The findings make clear that in pay-TV, there is still
everything to play for.”

The survey shows more consumers intend to do their holiday television
viewing on smart TV sets (85% in 2016 versus 80% last
year), while slightly fewer plan to watch on mobile devices,
which include smartphones, tablets and laptops (46% versus 42%
in 2015) – which tracks with industry figures showing stronger sales of
smart TVs with built-in OTT compatibility.

Other key findings include:

Pay-OTT adoption by millennials remains strongest with 52% of
all survey respondents under age 35now having a subscription

Nonetheless, other key demographics are catching up, as 47% of
35-44-year-olds now have a pay-OTT service, compared to just 27%
last year, while 45-54s with subscriptions have risen to 42%
from 25%

Younger audiences are more likely to sign up to OTT, with under-35s
now nearly three times as likely to subscribe before Christmas
as the 55-plus age group

Top of the list of factors that would make an OTT subscriber terminate
service is “too expensive” with 63% of those that
already have a subscription listing it among the top three reasons
they would cancel

While “not much too watch” was the next most popular answer (42%),
“bad customer experience” (35%) was nearly as prevalent a
reason and nearly as many list “provider does not seem to care
about what I want and so doesn’t cater to my needs”(30%)

“Clearly, no OTT operator can take continued growth for granted but must
find ways to build brand and strengthen loyalty,” Vaghela says.
“Increasingly providers need to look beyond their content offering and
use data-based insights to engage subscribers at the right time, with
packages that meet their needs, while providing a positive overall
customer experience.”

For more research results, download the full report, entitled OTT
isn’t just for Christmas: The Gift that Keeps on Giving by clicking here.